‘There has to be more investment in real estate for it to contribute more to GDP’
KNIGHT FRANK NIGERIA is the oldest and most formidable partnership that exists in Nigeria. It is part of a global family that has existed for decades. In this interview, Senior Partner/CEO, FRANK OKOSUN, speaks on the footprints of this partnership in the last 55 years of operation in Nigeria. Okosun, a thorough-bred professional, who rose through the ranks to where he is in the company today, also speaks on the challenges in the Nigerian real estate market and proffers solutions. He speaks with CHUKA UROKO. Excerpts:
The Coronavirus pandemic crept into the global economy in 2020 and swept aside many businesses including real estate. Many have not recovered from the impact of that pandemic. How did you fare; what sustained you?
Knight Frank Nigeria is part of a global family that has a robust business continuity plan for scenarios as experienced last year. As the pandemic commenced, the plan was triggered and enabled us to continue our operations with minimal disruption. I must also give a lot of credit to our local Nigeria team as they have been very resilient and creative in the past 20 months, enabling us exceed even our own performance targets despite the global downturn.
The real estate sector grew by 3.85% in the second quarter of 2021 and this has be attributed to the resilience of the sector and the investors, What other factors made this growth possible?
I’m very proud of what I and my colleagues in other firms have achieved in Nigeria’s real estate market. The sector has grown and matured significantly in the last couple of years. However, 2020’s growth is not unrelated to the fact that our sector became more attractive than money markets as interest rates were down. Consequently, there was more traction in real estate and as such the growth was recorded.
Analysts say this growth may not be sustainable, citing serious threats coming especially from macroeconomic issues. Do you share this view? What other threats to the growth are there?
While real estate markets are closely linked to economic performance as a whole, real estate enjoys a peculiar position in that it is the most tangible and real investment a person or institution can make. As such, the demand and supply of real estate is a phenomenon that will always exist as long as the country exists with people in it. Several other sectors may become disrupted or overtaken by technology but the real estate market can only be transformed for better. I do not fear for the sector, I only fear for sector players who refuse to change with the times and adopt technology in their craft.
Read also: Nigerian economy and real estate sector
Nigeria has huge housing deficit which is seen as an opportunity for investors, yet the sector is not counted among top performers in the economy. What would you suggest to make the sector contribute more to economic growth?
There has to be more investment in real estate for it to contribute more to GDP and economic growth. This investment can be from indigenes as well as foreigners. We need to deliberately court both local and international investors to come in. We need to give them incentives to bring in significant capital. We can conceptualize schemes, master plans, public-private projects that call for capital. If we don’t make these calls, capital will go to other countries that are calling for it, and there are many countries calling for capital, even our neighbours Ghana, Cote d’voire and Senegal are doing a great job at that. We need to do better.
Now, tell us; what preoccupies your minds at Knight Frank Nigeria at the moment?
For the past two years, we have been on a singular drive to reposition Knight Frank as the real estate services company of choice in Nigeria. We are the oldest and most formidable partnership that exists, but at some point in our history we became too big. We are now more nimble, with a more dynamic and younger team. In the last two years, we’ve attracted the best and the brightest to join us and we are still doing so much more. We are instituting an academy to attract even younger talent at the graduate level and bring them to high standards via deliberate mentoring and coaching.
Unarguably, you are the oldest estate agency practice in Nigeria. Looking back to when you started, what footprints do you see?
I feel honoured to lead Knight Frank in Nigeria and to be part of the KFN story. This is because we have led or been part of the most critical and notable transactions in Nigeria’s real estate history books. Both international and local, government and private institutions know that they can rely on our expertise for real estate advisory, management, brokerage and valuation services, as they have done in the past. We’ve been in the country for over 55 years now, and we look forward to many more decades of professional services excellence.
Your Real Estate Academy is an ambitious proposition. Tell us about the academy.
The academy is a blend of our corporate social responsibility with a need to deepen the expertise levels in the real estate sector. We currently find a dichotomy between the knowledge-level of fresh graduates and what is expected from a fresh hire. Some basic expectations of supervisors are often not met which sometimes leads to early terminations or frustration on the job. This is not peculiar to Knight Frank, but it’s seen across the sector.
I believe this is what the banks were experiencing that made them create training schools. I believe as sectors grow, there is a need for the biggest firms to do additional training for fresh hires. Real estate in Nigeria is at that stage, and we at Knight Frank have decided to do something about it.
The academy will train the graduates on not just real estate skills but also life skills such as presentation, sales, public-speaking, negotiation and customer management skills. We are truly excited about the prospects and going through great lengths of details to fine tune the structure and curriculum of the academy.
The slowdown in economy has affected income across board, leading to a significant drop in consumer purchasing power. What is your experience with valuation and facilities management?
Economic slowdown has indeed created some negative impact on service charge prices and collection. Especially in middle class location, the agitations on facility management and service charge activities have heightened more than previously experienced. On the upper end of the spectrum, this is much less as can be expected. However, as prices have gone up for line items, so has the service cost which most of our clients tend to understand. For valuation services – our charges are in sync with asset values, and asset values have equally risen.
Technology is increasingly gaining traction in the real estate industry. How much of this do you leverage in your operation? What benefits have you seen?
Technology has simplified a good number of aspects of our work, especially in terms of communication, accounting, management and measurement. We’ve leveraged some gadgets and software in getting things done smarter.
Businesses are organic and therefore grow with time. What are your growth projections for Knight Frank Nigeria in the next decade?
Aside from stamping our authority as the leading real estate services company in the country, there are so many things in the offing for Knight Frank Nigeria –and it’s all very exciting. There are new service lines and specializations we are keen to add to our line up. New areas such as healthcare real estate management, specialized residential and a little bit of proptech solutions.
We are also keen to do more in terms of industry and public engagement. Valuation and brokerage services need a lot more standardization and even specialization within it, and these are growth areas that will exist in Knight Frank Nigeria in the next couple of years.